Taking Stock of European Equities

Europe's momentum has taken a knock in recent weeks. Low inflation, disappointing growth and political risk have somewhat marred an upbeat story. German bond yields have plummeted, sending a potentially worrying signal about growth. But European stocks still look like a decent buying opportunity.

Indeed, Europe is outpacing the U.S.; the Stoxx Europe 600 index is up 4.8% in the year to date, versus 3.4% for the...